PRECIOUS-Gold inches up as dollar steadies vs euro

Gold prices edged higher on Tuesday
after falling the previous day on the strength of the dollar,
with investors keeping a close eye on currency markets for
bullion's near-term direction.

The dollar has been the main driver for gold in recent weeks:
a firmer dollar typically hurts the precious metal, as it makes
dollar-priced gold more expensive for non-dollar holders and
dampens interest in bullion as an alternative asset.

A weaker greenback supports gold if investors are selling the
U.S. currency to buy other assets including gold. If dollar
selling is due to U.S.-related concerns, gold can also benefit
from its status as a hedge against risk.

"The dollar's still the main driver behind gold's movement,"
said Adrian Koh, an analyst at Phillip Futures in Singapore.

"Gold's very much still in a sideways consolidation pattern
between $920-$980," he said, adding that he expected the market
to remain in that range until a clearer picture of the U.S.
economy emerged.

Spot gold XAU= rose 0.3 percent to $944.60 an ounce as of
0531 GMT, compared with New York's notional close of $941.40. It
hit a one-week high of $957.65 on Friday and has since hovered
below that level.

In the currency market, the yen was broadly firmer as
investors took a pause from a recent rush to stocks and
higher-yielding currencies, with focus shifting to U.S. data.
[USD/]

The dollar was nearly flat against the euro EUR= after
inching up against the single currency on Monday.

U.S. gold futures for December delivery GCZ9 were up 0.3
percent at $946.10 an ounce, compared with $943.70 an ounce on
the COMEX division of the New York Mercantile Exchange.

Traders are looking to consumer confidence, durable goods
orders and housing data due this week to gauge the state of the
U.S. economy.

Koh said traders were looking for housing data for further
signs that the housing market may have stabilised.

Reflecting a lack of market direction, no new investment was
made in the world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust GLD, which said its holdings were steady at
1,066.41 tonnes as of Aug. 24. [GOL/SPDR] link....